Solar eclipse after final proposal

2010-01-22

As we wrote last week ( "Setback for the PV industry"), the German Environment Ministry this week presented their final proposition for the reduction of feed-in tariffs. The result was a 15% cut and this hits the sector. The decision was delivered by Environment Minister Norbert Roettgen who took the opportunity to express his full support for the sector which he wants to deliver 4-5% of the German electricity production in 2020, as compared to 1% today. Perhaps this is contradictory, but it is nevertheless positive.

A decrease in feed-in tariffs by 10% as of January 1 this year and another cut by 10% on January 1 next year, and perhaps even a further reduction of 5-10% by mid-2010, has been in the cards. Now, then, the suggestion is a cut by 15% (instead of 5-10%) as of April 1 for roof-mounted systems, and by July 1 for ground-mounted systems. One fourth of the feed-in tariffs will thus disappear in six months and in a year one third will be cut.

The proposition will now be mangled by four different agencies before a final decision will be reached in March. Thus, there is still a chance that the final decision might be different - better even - than the proposition at hand, although that chance is rather slim. The best chance for a revision is, according to several observers, during the penultimate parliamentary session which will take place the last week of February.

Solar and wind power constitute ca 15% of German electricity consumption and the sector has long been a pride of the country, and many other countries have admired its subsidy schemes. 40 countries have copied them. Maybe these subsidy cuts will kill the goose that once laid the golden egg.

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